(Newswire.net — September 19, 2020) — According to government research, 8.5 percent of all Americans didn’t have any health insurance coverage as of 2018. That’s 27.5 million people who’re only one serious illness away from financial hardship.
Unless you have a boatload of money, you need to tap into one of the various types of health insurance plans available to afford care when you need it.
Here’s a quick guide covering the types of medical insurance plans available to help you settle on the right policy for you.
1. Health Maintenance Organization
A health maintenance organization (HMO) is a type of medical insurance offering healthcare services using a network of healthcare facilities and providers.
An HMO will enter into contracts with these facilities and providers, agreeing to pay a fee for a defined set of services that the HMO members can receive. That enables the HMO to offer better premiums and high-quality services.
In addition to low premiums, there is no paperwork you need to file when making an HMO claim. You also pay very low or no deductibles at all with this plan. What you do pay, though, is a copay.
A copay is an amount you pay whenever you visit the clinic, get a test done, or receive a prescription. It’s worth noting that HMO co-pays are usually affordable and range between $5, $10 to $15 per instance.
Once you subscribe to an HMO plan, you can only visit a doctor within the network. You’ll have to appoint a primary care physician (PCP) from within the network. The PCP will be your first stop whenever you need medical care.
As such, if you need to see a specialist, you must first go through your PCP, who will then give you a referral. The specialist you see will most likely be within your HMO network too.
If you do see a doctor who isn’t in your network, you’ll pay out-of-pocket. Whenever you receive urgent care while not in your HMO region, the plan will pay for it but at in-network rates.
Should a non-participating doctor treat you during urgent care, you can expect them to bill you and not the HMO. For some subscribers, living or working in the region the network covers may be necessary to qualify for an HMO.
2. Preferred Provider Organization
A preferred provider organization (PPO) is a common health insurance program whereby medical facilities and professionals offer subscribers services at reduced rates. Every medical facility and partner in a PPO is known as a preferred provider.
With a PPO, the insurer contracts the healthcare professionals to get better rates for their subscribers. In return, the insurer will pay the PPO a fee for accessing the network of providers.
A PPO subscriber can visit any provider within the network. Unlike an HMO, you don’t have to go through a PCP first. If you need out-of-network medical care, you can access it even though you’ll have to pay more.
Any out-of-network medical care needs to meet the reasonable and customary fee requirements. If you exceed this limit, you will either settle the extra cost or won’t be able to access the provider.
A PPO plan typically costs more, and you have to settle the copay for each visit. If you have a deductible, you must exhaust it first before the insurance kicks in.
Despite the higher premiums, a PPO is valuable to a subscriber as it offers them more flexibility. You can visit other providers during urgent situations, and since the plan covers a large area, you have a wider choice.
Whenever you visit an in-network provider, there is little to no paperwork to fill. However, you’ll first need to pay for every out-of-network visit then file a claim for the PPO to reimburse you.
3. Short Term Health Insurance
Short-term health insurance (STM) aims to help subscribers fill a temporary gap in your insurance coverage. Some of the reasons that necessitate buying short term health insurance include:
- Loss of a job
- When you’re waiting for new coverage to kick in
- When you’re waiting to qualify for Medicare coverage
- When you’re ineligible for special enrollment in an Affordable Care Act-related plan and have to wait for the next enrollment window
Most states will renew STM plans up to three times. Given that the policy term is between several months and one year, you can hold the insurance for three years.
Not every state supports STM plans. You won’t find any short term medical plans in New York, New Jersey, Massachusetts, and California.
STM plans come with many restrictions since they don’t face a similar regulation degree as the Affordable Care Act-related ones. The maximum limits for an STM plan can be prohibitive, and the policy may not cover essential benefits.
On top of that, you can expect high deductibles or copays. Short term medical insurance won’t cover any pre-existing conditions as well.
With that said, an STM plan can be useful. You just have to dig into the details before signing up first.
4. Point-Of-Service Plan
A point-of-service plan (POS) is a policy that blends HMO and PPO features. As a subscriber, you’ll need to select a PCP as your first medical care pit stop. If you have to see a specialist, your PCP will provide the referral.
You can access out-of-network care, but you’ll pay more for it than if you were to go in-network. If you do get a PCP’s referral for out-of-network care, though, your POS plan will pay substantially more.
When you need care that goes beyond preventative services, you may pay a higher deductible. You’ll also have to cover the copay. Visiting an out-of-network provider will lead to you paying out of pocket before the POS plan can reimburse you.
Types of Health Insurance Plans
A health insurance policy is an investment you make and hope you never need it. When you do need it, but don’t have it, it can lead to deep financial straits. Take time to research the various types of health insurance options in the market to find the best fit and protect your health.
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